The price of gold extended upside movement on Wednesday, increasing the value of yellow metal to more than $1070 an ounce following the release of US consumer confidence report. The technical bias however still remains bearish because of a Lower Low in the recent downside move.
As of this writing, the precious metal is being traded around $1069. A hurdle may be noted near $1080, the 23.6% fib level ahead of $1100, the psychological number and then $1118, the 50% fib level as demonstrated in the following daily chart.
On the downside, the yellow metal is expected to find a support around $1046-$1050 territory which is the confluence of psychological number as well as swing low of the year 2015. A break and daily closing below the $1046 support could incite renewed selling pressure towards the $1000 level.
US Consumer Confidence
Americans are gaining confidence due largely to the improving labor market, boosting hopes that the economy will carry momentum into 2016. The Conference Board said Tuesday its monthly index of consumer confidence rose to a reading of 96.5 in December from 92.6 in November. Consumers’ assessment of present conditions and their expectations for coming months both improved, the board said. Consumers are the lifeblood of the U.S. economy, providing more than two-thirds of demand for all goods and services produced. Economists pay attention to the mood of consumers because when households are confident, they often step up spending and investment.
Considering the overall technical and fundamental outlook, buying the precious metal around current levels could be a good strategy in short to medium term.